Bookkeeper, or accountant or CPA...what do I need?

Question

Hi I sold my house and have a sizable bit of cash and want to start buying residential rental property in Texas. I live in San Diego, CA. I am just small time and will just buy one at a time.

My question is how do I keep my finances squared away? I don't want to go to a big accounting firm and pay big bucks (I'm cheap) but what do I really need? I'm thinking I just need someone to keep me on track, tell me what software to use and do my taxes every year.

Maybe I just need a person working out of a hole in the wall business or even out of their house so what should I be looking for? An accountant or just a bookkeeper or what???

Thanks, Joe

Dina Lewis · Answer

@Josh Calcanis I would say it depends on person. Quickbooks is good when you have lots of checks to make, you have contractors, employees, etc. It's easy to enter all expenses, very often you can download credit cards charges from credit card websites, reconcile bank statements, set depreciation amounts, and see how your business is doing. But you can shop around CPA companies because they provide this kind of service for small businesses as well. It's nice to have a bookkeeper and keep everything on your own computer. I do this kind of bookkeeping for small businesses and then at the end of the year I give reports to CPA to check.

So you can do it by yourself or find someone who can just come and organise everything for you - once a week, twice a month or once a month, depends on your load.

In my personal opinion if you don't have much checks to pay and can have one separate credit card for business expenses, you can keep your records in Excel. Maybe make folders for each month and put all expenses there, then review or hire someone to review it for you.

If you have one credit card which you use strictly for business, you can just allocate expenses every month and credit card statements will be a proof of your expenses. To allocate your expenses look at your tax report from CPA, this way you will know what they are asking for and allocate accordingly.

I hope it helps.

Let me know if you have any questions.

Dina Lewis · Answer

Quickbooks is the best but if you don't have too many transactions you can keep tracking all your expenses in Excel spreadsheet. Basically when you go to CPA office all that they want to know all your money in and out. Then they can figure out what they are going to use and what they are not going to use.

I love excel spreadsheets because you can make a different spreadsheet for different purposes and then connect them all together.

@Josh Calcanis why you didn't like your experience with CPA?

Christopher Cousin · Answer

@Joe Koppel The true benefit in a CPA is tax planning, not tax prep. Plugging numbers into a computer program that spits out a tax return to file is an easy process.  A qualified CPA is far more than a tax preparer.  They can advise on how to set up entities on the front end and how to structure transactions to help you save literally thousands in taxes in some cases.  I wish you the best in your investing.  You should also check out the Mark Kohler podcast as it has a wealth of information on tax and legal issues.

@Josh Calcanis What are some of the issues that you are running into with your excel system?  Also what features are you looking for?  I might be able to suggest an option for you but I would need to know more about what your needs.

Josh Calcanis · Answer

@Dina Lewis Thanks! Is there a limit where you find it's a good time to transition over to Quikbooks?My CPA experience wasn't bad because of the Accountant. It was more on me learning what to keep track of and how to organize it all. Spent a bit more time with the CPA than I should have because I wasn't as prepared. @Christopher Cousin Right now I'm just trying to find something to track expenses, mileage, and separate by property or unit if necessary.

Josh Calcanis · Answer

Only month old thread, so I'm hoping it's still got some life in it.@Erik Eisenman you brought up Quikbooks. Are there any other programs you'd recommend.Just did my first full year of expenses with my CPA and it was a blast *sarcasm*I used excel sheets for the mileage logs, misc expenses, HOA fees, etc. There has to be a better way. I'm only at 4 units right now.

Joe Koppel · Answer

Thanks Eric, that's the kind of info I'm after. I will try to look him up.

Joe Koppel · Answer

Thanks Tyler but I have a real estate agent already that I'm confident in in Texas and also her business partner that is a a contractor and real estate agent too. My house here in San Diego has been on the market for about a week and so I am just waiting for it to sell and I will begin buying property in Texas.

I want to get off on the right foot with proper accounting and bookkeeping.

Bookkeeper, or accountant or CPA...what do I need?

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